Mayr-Melnhof Karton AG — Earnings Release 1999

May 2, 2000

News Details

Ad-hoc | 2 May 2000 08:32

*vwd Ad hoc-Service: Mayr-Melnhof Karton AG RES 19

Ad hoc-announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— FINAL GROUP RESULTS FOR 1999 RESULTS ABOVE SCHEDULE – INCREASED DIVIDEND – Net income of EUR 61.4 million/ ATS 845 million exceeds ambitious target for the year – Increased dividend from EUR 1.45 to EUR 1.55 per share – Capital expenditure of EUR 74 million improved productivity and quality – Record order backlog in the Cartonboard Division – Enduring rise of raw materials prices necessitates further price increase for cartonboard and folding cartons The Mayr-Melnhof Group ended the 1999 financial year with a result above schedule. The consolidated net income was EUR 61.4 million / ATS 845 million. This clearly exceeded the ambitious goal for 1999 of EUR 58 million / ATS 800 million. The 1998 net income which included exceptional income effects from the release of provisions and taxes, totalled EUR 63.3 million. Due to this positive development, the Managing Board will propose an increase in the dividend from EUR 1.45 to EUR 1.55 per share. Results maintained at high levels The result on ordinary activities of EUR 81.4 million was slightly above the previous year’s figure of EUR 81.0 million. Despite a strong increase in raw materials costs, difficult market conditions in Eastern Europe and start-up costs for new machinery, the Mayr-Melnhof Group managed to achieve an operating profit of EUR 86.1 million (1998: EUR 87.4 million). This was primarily due to a full utilisation of capacities and increased productivity. At EUR 63.4 million, the Cartonboard Division’s operating profit was greater than the previous year’s level (EUR 61.9 million). The operating profit reported by the Packaging Division declined from EUR 25.4 million to EUR 22.7 million. Overall, the Group achieved an operating margin of 9.5% (1998: 9.6%). Despite the expansion of new business in both divisions, consolidated net sales increased only slightly to EUR 911.3 million (1998: EUR 904.8 million). This resulted from the disposal of German recycling companies in 1998 and 1999, as well as from a higher level of intra-Group sales. The Group’s cash earnings totalled EUR 127.4 million compared to EUR 128.7 million in the previous year. Expressed as a percentage of sales, the Company’s self-financing strength continued to remain at a high level of 14.0% (1998: 14.2%). In 1999, the Group was once again able to take advantage of losses carried forward from previous years, though to a lesser extent than in 1998. This resulted in increased expenses for taxes, totalling EUR 15 million (1998: EUR 8.5 million). The result on extraordinary activities totalled EUR -5.0 million and resulted primarily from restructuring costs and provisions. Investment in tangible fixed assets totalled EUR 73.9 million (1998: EUR 68.9 million). Its primary focus was the implementation of the latest technology, further enhancing both quality and output, while also improving the efficiency of the machinery and processes. The Mayr-Melnhof Group employed an average of 5,030 people during 1999 (1998: 5,024). 2,432 of these were employed in the Cartonboard Division, and 2,598 in the Packaging Division. Outlook Due to the positive general economic situation, both the Cartonboard Division and the Packaging Division anticipate a healthy development of demand and good utilisation of their machines in the year 2000. Due to heavy demand for pulp and waste paper, along with further price increases for oil, natural gas and petroleum derivatives, prices for the most important raw materials used in the manufacture of cartonboard rose rapidly at the beginning of 2000. From a current perspective, it will be possible to compensate for the sharp rise of raw materials costs through higher prices for cartonboard and folding cartons, increased efficiency and productivity, as well as the consistent implementation of cost reduction programmes. Long-term supply contracts help to ensure a portion of the supply of waste paper for the cartonboard mills. Projected investments are focused upon optimising processes and products, and also the implementation of the latest technologies and systems. A new strategic focus has been established upon the elaboration of e-commerce solutions. The objective for the year 2000 is to achieve a further increase in the Group’s profitability, while continuing its course of growth. Successful start of the year 2000 Due to the very good development of business during the first quarter of 2000, the interim results for this period will clearly exceed those of the same period in the previous year. During April, the order backlog of the Cartonboard Division once again increased compared to the previous months, currently totalling 130,000 tonnes – a very high level, equalling approximately 5 weeks of full utilisation of capacities. Forthcoming results: May 16, 2000 Results for the first quarter For further information, please contact Stephan Werba, Investor Relations, Mayr-Melnhof Karton AG, Brahmsplatz 6, A-1041 Vienna Tel.: (+43/1) 50136, Fax: (+43/1) 50136-1195 e-mail: investor.relations@mm-karton.com New Web Site: http://www.mayr-melnhof.com End of Message